The dissatisfaction with the modernisation approach led to the emergence of another, more critical, school of thought namely the dependency school.
This school has two major intellectual streams: a Marxist stream, close to Lenin and other classical theorists of imperialism; and the structuralist stream, incorporating the thinking of Hilferding, Bukharin and Hobson. These thinkers found support, in a policy context, in the works of Raul Prebish and some other social scientists, for example, who worked in the United Nations Economic Commission for Latin America (ECLA) in the 1 950s. These latter groups have come to be known as the structuralist school.
The Marxist view, primarily articulated by Baran ( 1 973), asserts that the developing countries have to recognise that they are trapped in a capitalist global economy which is basically unequal and exploitative. This implies that economic development efforts of the poorer countries will be resisted because such development is usually against the interests of the capitalists, and even the workers, in the advanced countries. As a way out of this potential impasse, the ECLA structuralist group proposed a development strategy based on import substitution in the Third World countries. This strategy justified restrictive commercial policies such as tariffs and quantitative restrictions on imports by poorer countries seeking to industrialise themselves. This inward orientation of economic policies or development found acceptance in many developing countries in the 1 950s and the 1 960s. This approach, though not Marxist in its ideological roots, still accepts the unequal nature of the relationship between developed and developing countries. It is this acceptance that is reflected in its policy prescriptions.
An extension of these lines of thinking is embedded in another stream of the so called dependency theory. This branch of the dependency theory maintains that the poorer countries are like 'satellites' of the advanced, more developed, countries which are the 'metropolis'. The former countries are dependent for capital, technology and
market on the industrialised countries in Europe and North America. However, given the unequal economic powers of these two groups of countries, a relationship of inequality and 'unfair exchange' develops. The satellite countries experience a flow of wealth out of them in exchange for goods, services and technology from the metropolis which are not always appropriate for their balanced development or poverty alleviation. So, the poverty and the lack of economic growth which often characterise the satellite nations are linked to the exploitation that results from their dependency on richer nations according to this line of thinking (Laite, 1 988). This satellite-metropolis relationship is often replicated within the poorer countries with the creation of metropolitan towns and their rural satellites. A bourgeois middle class elite is created within the metropolitan society which administers the relationships between the metropolitan and the satellite areas. A consequence of this development is the growing polarisation of real income and wealth between the metropolitan and the satellite groups. Capital accumulation at the centre is often at the cost of the poorer peripheries within the countries. This creates 'internal colonies' in the developing countries (Long, 1 977). The 'marginal underclasses' are made up of the urban poor - working perhaps in the informal economy, on plantations or in mines, as well as the peasants many of whom are landless. Economic development largely passes these people by (Laite, 1 988).
The notions of dependency were further extended by Andre Gunder Frank, who developed an analysis of underdevelopment based on unequal relationships of nations. Frank argued that colonisation of non-industrial countries created 'modem metropolis' within the peripheries such as in countries like Mexico, Peru, India and parts of Africa, for example. This development suppressed or transformed viable social and economic systems which these countries previously had. Such a transformation enabled capitalist accumulation to be used in the development of the colonising powers. The resulting fate of the colonised countries was and remains characterised by their lack of capital, productivity and inappropriate technology which combine to perpetuate extensive poverty of the masses in an environment of overall underdevelopment, argues Frank (Frank, cited by Corbridge, 1 988).
Frank and, later, Wallerestein ( 1 974) have further argued that the economies of the peripheries have been capitalist since they first started to produce goods for the purpose of exchange in the world market. The fact that the production structures in the peripheries are based on several different systems of 'labour control', such as 'free' wage labour, serfdom and slavery, is not thought by these authors to be relevant to the argument. Wallerestein argued that the relations of production that define 'a system' are those of the system as a whole which, according to him, was made up of the industrialised European and North American countries on the one hand, and the poorer developing countries on the other. Free labour is an ingredient of capitalist societies, although it is not a characteristic of all the productive enterprises of the developing world.
The dependency approach to analysing economic development in an international context has been widely criticised by both Marxist and non-Marxist writers. The metropolis-satellite relationships, a key element of the dependency theory, is criticised as 'simplistic'. The agents of oppression and subordination in the centre and in the periphery are not identified very precisely, it is pointed out, for example. Also, dependency theory is unable to account for the variety of social structures encountered in the Third World countries. Thus, even where there are dependency relationships, they operate differently in different structural contexts. Furthermore, satellite nations or regions do not often have enough opportunity to accumulate capital and wealth, or to establish strong political institutions as assumed by the dependency theorists. The dependency approach also fails to analyze the process of class formation and the role of classes in the Third World. The emphasis of the dependency approach is the relation of exchange between the centre and the periphery within the international capitalist system. This relation, while an established feature of the international economy, does not necessarily lend itself to the interpretation the dependency approach ascribes to it.